Sunday Observer Online


Sunday, 15 February 2015





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Government Gazette

Reduced prices, a boost for household income

The Cost of Living (CoL) is likely drop to its lowest levels in recent history with the price reduction of essential goods as well as the unprecedented Rs. 10,000 to the public sector employees and Rs. 3,500 to pensioners.


Certain private sector companies too will soon respond to the Finance Minister's request to increase the salary of employees.Never in the recent history of the country that the masses have received such a big relief and their productivity will certainly increase. Apart from the salary hike, reduction of fuel and LP Gas prices by a praise-worthy figure is a major boost for the households, especially the poor and middle class families.

The Public Administration, Provincial Councils, Local Government and Democratic Governance Ministry said last week that the public sector employees will receive a monthly allowance of Rs 5,000 from this month in addition to the allowance of Rs 3,000 which they have already been granted by the previous government. That means, their salaries would go up by Rs. 8,000 while another Rs. 2,000 would be added to their salary from mid this year.

Hence, President Maithripala Sirisena would keep to his election promise of Rs. 10,000 salary increase to public sector employees. This is a salary hike of 47 percent.

At the 2010 presidential election, New Democratic Front candidate Sarath Fonseka pledged to grant a salary increase of Rs. 10,000 to public sector employees. But Fonseka narrowly lost the election and his rival Mahinda Rajapaksa offered only a salary increase of Rs. 2,500.

But at the 2015 presidential election, the common candidate offered four times more than what President Rajapaksa had offered. Though many thought that would be another broken promise and would not be practical, newly elected President Maithripala Sirisena fulfilled that long-felt dream of public sector employees just weeks after his election as the First Citizen.

New circular

The new circular pertaining to the salary increase proposed by the new government through the interim budget has already been issued under the signature of Public Administration and Home Affairs Ministry Secretary J. Dadallage. This salary increase will be granted in accordance with the pledge made by President Sirisena during the presidential election to increase salaries by Rs.10,000 for public sector employees under the 100-day program.

Under the first phase of the program the above salary increase of Rs 5,000 rupees will be added to the salary from this month in addition to the Rs 3,000 allowance given from last month. With this interim allowance, the state employees will receive an additional salary increase of Rs 8,000 from this month.

All ministry secretaries, provincial chief secretaries, all department heads, chairmen of all state corporations, statutory boards and government institutions have already been informed to pay this allowance from February through the 05/2015 Public Administration Circular.

In addition, instructions pertaining to the increase in pension were also included in the above circular. According to the interim budget of the present government a further increase of one thousand rupees to the pensioners' allowance, in addition to the 2,500 rupee increase for the pensioners as proposed through the previous budget will be paid from April.

This circular which was issued under the title "Revision of the Allowances of Officers in Public Sector and Pensioners as per Budget Proposals 2015" with the approval of the Treasury is based on Public Administration Circulars issued on November 12, 2014 and December 31,2014.

Finance Minister Ravi Karunanayake, in presenting the mini budget in Parliament last month, requested the private sector employers to increase the salaries of employees by Rs. 2,500.

The budget also proposed to grant an allowance of Rs 20,000 for pregnant mothers as pledged under the Hundred Day Program.

The mini budget also granted a certified price of Rs 50, Rs 80, Rs 350 and Rs 80 to paddy, potato, rubber and raw tea leaves when they are purchased from farmers.The certified price for fresh milk at Rs 70 which is an increase by Rs 10 is noteworthy.

The price of kerosene would be reduced by Rs 6 while the prices of 13 essential items have been reduced by the removal of taxes. The price of sugar has been reduced to Rs 85 a kilogram while the price of milk powder has been reduced to Rs 325 (400g). The price of Sustagen milk powder has been reduced by Rs. 100 (400g). Flour, bread, green gram, sprats will be reduced by Rs 12.50 per kilo, Rs. 6, 40 per kilo, Rs. 15 per kilo respectively.

The new Government led by Prime Minister Ranil Wickremesinghe has taken several meaningful steps to reduce cost of living and improve the living standards of people, especially those in the lower and middle income groups.

Prices of several essential goods too have been reduced, making a direct impact on the cost of living. The price of canned fish was reduced by Rs 60 in the market while corriander and Maldive Fish was reduced by Rs 20 and Rs 200. The price of a 12.5kg cylinder of gas was reduced to Rs. 1,596 which is a reduction by Rs. 300. The tax on vehicles below 1000 CC capacity was reduced by 15 percent.

Bus fares have now been reduced by 10 percent. The minimum fare for the first section has now gone down to Rs. 8. Senior citizens too have benefited from the new economic policies of the Government. Senior citizens with Rs. 1 million in their bank accounts will be given a 15 percent interest rate while the interest on gold jewelery pawned at banks, that don't exceed Rs. 200,000 in value will be waived off completely. It was also proposed to waive off 50 percent of the loans borrowed by farmers.The fertilizer subsidy which was provided by the previous government will be continued.

What is unique in the recently presented mini budget was the decision to save Rs 2.5 billion by cutting down on the number of ministers. But the decentralised budget of ministers will be increased from Rs. 5 million to Rs 10 million, enabling them to embark on more public projects in their districts.

Farmer community

The Government and President Sirisena have made special emphasis on the farmer community, taking some vital steps to protect them. President Sirisena, addressing a function held under the theme Janabhinandana Mangallaya at Medirigiriya on Monday said that there is an urgent need to ensure a continuous income for farmers especially the paddy farmers.

The President has said that he is well aware that mainly the paddy farmers are undergoing financial difficulties notwithstanding the increasing of paddy prices or implementing a fixed price for paddy.

The Treasury will release Rs.10 billion to purchase Maha harvest paddy.

These monies would be utilised to purchase a kilo of Samba paddy at Rs.50 from farmers. Paddy will be purchased through the registered farmer associations across the country until April. Plans are afoot to purchase the first stock of paddy from Ampara, Kurunegala and Mullaithvu.

"Though paddy prices have been increased several times, paddy cultivators are undergoing financial hardships. It indicates to us that there is something wrong with this. We understand that it is due to the farmers not receiving a continuous income throughout the year. It is only during the harvesting season that the paddy farmers receive an income. Therefore, a mechanism will be put in place for farmers to receive a continuous income," the President was quoted as saying.

These measures will be taken after considering the market trends and latest technology available in the agriculture field, the President said. The President admiring the bold decision of people of the country to end the former corrupt regime said that their sacrifices were bearing fruit today.Under the 100-Day program of the Government several positive measures and initiatives have already been taken to benefit the people and the country. Under this program a new constitution is being prepared.

Steps are being taken to end corruption and fraud. A Presidential Commission will be appointed next week to expedite the process of inquiring into corruption.

Although the Government has taken steps to help the masses and bring down cost of living, the full benefit of the tax reductions and price reductions have still not been fully passed to the customers.

For an example, although the petrol and diesel prices were reduced by a notable amount, those who operate school and office vans are yet to pass the benefit fully to their commuters.

There is no exception with three-wheel and other taxi services as most of them still maintain the same fare structures. Despite the reduction of LP Gas and wheel floor prices, confectionary/ bakery items other than bread have not been reduced.

Hence, it is the duty of the Consumer Affairs Authority to make sure that the benefit of the Government price reductions are fully passed to the masses. If not it would be the middlemen and the traders who would make merry although the Government is making a sincere effort to reduce the Cost of Living.

- Rasika


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